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LA CROSSE, Wis. (AP) — Luke Schulte drew a deep breath, paused and exhaled.

"I'm not sure," he said with a sigh. "It's been a really tough time, the last five, six years."

Schulte worked in lending, with a focus on agriculture and dairy producers, for most of his career. Now, as the market president of State Bank Financial in Sparta, the oldest community bank in western Wisconsin, he has a front-row seat to the devastation caused by the volatile ag and dairy market on surrounding rural communities.

His bank worked with producers to restructure their debt amid the crisis, but a large number of those producers have refinanced two and sometimes three years in a row — to the point where the bank can no longer help them.

"After many years of this downward slide, for a lot of them, that's not an option anymore," he said. "It's just become harder and harder."

Schulte said his goal is to put farmers in a better position financially, but banks are beginning to feel pressure from regulators and the FDIC. "When they come in, we have to have a really good explanation as to why we continue to refinance the operating notes."

Michael Lochner, economic specialist with the Wisconsin Department of Agriculture, Trade and Consumer Protection, also is feeling mounting pressure of the crisis as he and his coworkers struggle to help counsel farmers through the crisis.

The majority of calls routed to his office used to focus on transition planning, or how to pass the farm to the next generation. Now, he said, the majority of those calls consist of farmers who are financially stressed and seeking help.

The definition of financial stress has a wide range, but a large percentage of the calls come from those who are on the severe end of the spectrum or feeling pressure from a lender because they're more than 60 days past due on loan payments. That status could lead a producer to foreclosure or bankruptcy.

In 2019 so far, the number of farm closures has reached three per day, the La Crosse Tribune reported.

The decrease in the number of agriculture producers led to an increase in the number of implement dealers, such as grain suppliers, equipment manufacturers and distributors, as well as veterinary services, all staples of rural economies, that have closed or consolidated.

Lochner remembered working in the 1980s, when there was an implement dealer, a veterinary service and a dairy supply service within a 10- to 15-mile radius of any farm in Wisconsin. In the 1990s, he estimated that radius grew to 20 to 30 miles. Now, it's probably 40 to 60 miles, he said.

"As you have less (clients) for those specific businesses, they need to either merge with someone else or go out of business or get bigger," he said.

Stephen Bianchi, president and CEO of CCF Bank, a community bank that serves rural Wisconsin and Minnesota, recognized the symptoms of a suffering rural economy due to his past experience as a banker in South Dakota.

"When farmers were having good years, they were in town buying pickups, making improvements to their homes, to their farms," he said. "That economic activity in our towns, in our dealerships tends to diminish as a cycle like this (current crisis) plays out."

Today, farmers hold on to their equipment longer, they're not making the investments they used to make.

Mark Stephenson, director of dairy policy analysis at University of Wisconsin-Madison, agreed with Bianchi's assessment.

If producers earn a dollar selling milk, that dollar is spent on services such as veterinarians, or to buy groceries or tools at the local hardware store. When the milk price is down and those dollars earned are down, it does have an effect on the local economy, Stephenson said.

"As we have financial distress on farms, it ripples through these rural communities," he said.

The market downturn has yet to affect the price on land, which has prompted struggling producers to sell their acres to neighbors, an effort that added to the consolidation of farms in Wisconsin and across the Midwest. Today, it's not uncommon for a large farm to be managed by multiple families.

Schulte believes dairy prices hit bottom and will begin to recover but that recovery will be slow, and more producers will leave the industry even as dairy and commodity prices rise. As a result, consolidation on the producer side as well as among implement dealers will continue regardless of market recuperation.

The number of farm and implement dealer closures and consolidation has caused the rural communities in Wisconsin to shrink as younger generations move to larger metropolitan areas, in search of employment opportunities outside of the agriculture and dairy industry.

"From what I can tell, the rural population continues to get smaller and the La Crosses, the Madisons, Milwaukees, continue to grow," Schulte said. "We'll probably see, in the next five years, another large reduction in the farms — specifically the dairy farms that are out there in Wisconsin."

He predicts the number of Wisconsin dairy farms will decrease by half during the next decade due to rural flight. "Obviously if this cycle continues its trend of downward or low prices, that number will accelerate."

Milk prices have rebounded substantially, from an all-milk price of roughly $14 in 2018 to roughly $18 per hundredweight forecast by the end of 2019 by the USDA Economic Research Service. But that's still lower than the highest all-milk price reached in 2017, $18.90 in January of that year, when a lot of farms were operating at break even, Lochner said.

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